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Emerging from Covid-19
York Stone & Associates

Emerging from Covid-19

As New Zealand moves down the COVID-19 alert levels businesses face a long transition period from the unknown to the ‘new normal’.

Social distancing, strict health and safety guidelines, restricted international and regional travel are amongst numerous practises that will likely continue to apply for as long as COVID-19 remains a global threat.

This may mean a need to increase online presence, re-focus on the domestic market, or implement a completely new model of operation. Consideration should be given to the following areas.



Not all employees will be able to return to work as needed.

Employees with underlying health vulnerabilities or family members that cannot risk exposure, may not be able to return to work. Therefore, businesses need to question whether they will have
sufficient resources to commence operations and/or how can they function with a potentially smaller team. Pressuring employees deemed vulnerable could be in violation of the Health and Safety Act, potentially comprising failure to maintain a safe work environment. Early discussions with staff will enable a phased plan to be developed. 


Supply Chain:

Are products sold to, or suppliers based in, or product transported through a Covid-19 affected market?

These are important questions to answer before resuming operation because disturbances in the supply chain will impact a businesses’ ability to trade. As more businesses recommence operations at lower alert levels how does this impact supplier’s ability to deliver on time and to requirements? In a changing business environment, certain materials will likely be in short supply and alternatives needed, competitors will pivot into different markets and customer demand and behaviour will change. For example, prices previously established based on a particular experience or demand will need to be ‘reset’ if the experience or demand has changed.



Brick and mortar retail stores may need to establish an online presence.

Physical displays and signs on the streets will be irrelevant if there is no foot-traffic to capture the target audience. Therefore, utilising social media platforms, expanding and upgrading the business website, enabling ‘click and collect’ services and/or a delivery function will be an essential. However, this may not be possible if website and app designers are overrun with demand.


Cash-flow/banking relationships:

Adapting the business to the ‘new normal’ may require additional cash-flow.

With on-going overheads and limited revenue this is a fundamental challenge. Levers need to be pulled. Deferred payment terms could be negotiated with suppliers to enable a cash shortfall to be bridged as revenue streams start to resume. And periodically review your customers’ circumstances to confirm they are able to pay, come time to do so. New revenue streams could be secured by offering more favourable payment terms than competitors (for a fixed period) - but care needs to be taken to ensure you are not starting a race to the bottom.

Discussions with the bank are vital. Reassessing and confirming banking arrangements, extension of overdraft limits to meet short-term cash-flow requirements, and capacity for longterm funding. Consider all avenues in assessing what resources are available to assist with cash-flow, and ultimately, plan for cash-flow requirements for the next 6-12 months to identify peak funding requirements. Create 3 models, based on worst-case, expected and best-case scenarios. If a business can quantify cash-flow requirements and timing of when this is required, this will lead a more needs focussed conversation with the bank.

These are just some of the aspects to contemplate as businesses implement a COVID-19 recovery plan. Businesses that have a clear vision and plan ahead are more likely to emerge out the other side.

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